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HMRC internal manual

Corporate Finance Manual

Derivative contracts: tax avoidance: amounts not fully recognised for accounting purposes: commencement

CFM56114 to CFM56116 explain that for periods of account beginning on or after 6 December 2010, the derecognition anti-avoidance legislation operates as a general rule, wherever an amount is not fully recognised, as a result of the company being party to tax avoidance arrangements.

Periods straddling this date are treated as two separate periods of account, so in effect the new rules apply to credits and debits relating to amounts not fully recognised on or after 6 December 2010.


  • CTA09/S599B(2A) (the rule that denies debits where amounts are required to be fully recognised), and
  • CTA09/S599B(4) (the rule that requires a credit to be brought in where the fair value of the contract exceeds the carrying value in the period in which avoidance arrangements are entered into)

only have effect in relation to avoidance arrangements to which the company became party on or after 23 March 2011.